Technology is improving the valuation of homes and the appraisal profession works hard to refine techniques and improve accuracy, but at the end of the day, a house is basically worth what someone will pay for it.

You might begin by deciding why you want to know your house's value. Taxes too high? Pricing to sell? Refinancing or financing a purchase? Taking out a home equity line of credit? Valuing an estate? Personal net worth? You can answer some of these questions with a lot less effort than others.

Ranked from easiest to most difficult, here are four ways to find out how much your house is worth.

AVM Estimates. Those calculators on real estate web sites that value homes are called automatic valuation models or AVMs. They were developed by lenders like Fannie Mae and popularized by Zillow. AVMs are algorithms that estimate values based on the wide range of data, including local sales, prices and inventories. Like all calculators, they are no better than the quality of their data. They have difficulty accounting for factors like improvements to homes. Some tend to value on the high side, others on the low side. If you a good picture of the value of your home, look it up on four different AVMs. You'll be surprised at the variations, which suggests you might get a rough estimate if you average all four. You might also think twice about using an AVM estimate to make major decision like selling your home or making an offer.

CMA. If you are already working with a real estate agent, ask them for a CMA, or competitive market analysis, or your home. Unlike the AVM, a real estate professional will do the analysis and will include the value of improvements and hyper-local changes that might affect the value of your property like transportation improvements, new retail services and schools. Your real estate agent also has access to the latest sales and inventory data from your local multiple listing service. Ask for a download of the latest data for your locale.

Do it Yourself. Even if you know a lot about real estate and economics it's hard to come in with a good valuation on your own because good local data is so hard to find. The best sources are multiple listing services and firms like DataQuest, CoreLogic and RealtyTrac that cost money. Few MLSs make their data available to the public but you can get good, current MLS data from your Realtor if you ask for them. By monitoring listings and sales activity in your neighborhood through online real estate sites you can get a good feel for the market. Long times on market and price cuts are not good signs; fast sales are good signs.

Appraisals. When it comes to financing a home, an appraisal by a licensed professional is almost always required. Sometimes lenders will do an AVM estimate on a refi when they know the owner. Appraisals include on-site inspections and the selection of "comps" or comparable sales – homes of the same size close to you that have sold in the past six months. Appraisers also review local market trends. An appraisal may not be the final word on the value of your home in an absolute sense; appraisers are human and two appraisers may come up with two different values. However, it's unlikely someone would buy your house for more than the appraised value plus the down payment.

By following market trends on local real estate web sites including your local newspaper, real estate brokerages and the larger real estate listing sites that provide research and data you can get a good feel for what to expect in your local market. Real estate is all about supply and demand. When a new employer comes to town or a new plant opens, the demand for housing increases and prices rise. When the opposite occurs, prices fall. Keep track of inventory trends – they are the keys to tomorrow's prices.

Source: http://realtytimes.com/consumeradvice/sellersadvice1/item/32444-20150115-four-less-than-perfect-ways-to-find-the-value-of-your-home
Written by Steve Cook

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Source:11 Reasons to List Your Home For Sale During The Holidays
 

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Nearly half (48 percent) of first-timers headed to a brick and mortar lender to meet with a loan representative and receive personalized advice, yet even then, 43 percent reported that they did not completely understand the process. And only 41 percent of first-timers said their loan officer completely explained the types of loans, terms, special programs, fees and options to reduce their down payment.

First-timers want more transparency in the process, but transparency works both ways. Lack of experience and uncertainty about the process may keep first-timers from asking the right questions that could result in the right loan. Buyers may also be reluctant to share key financial information that could help the lender provide better guidance.

For all these reasons, you should assume that your chances of getting a loan are better than you think, but only if you're willing to do two things — ask questions and share information.

Here are some suggestions to help you:

1. Look for a lender who is willing to take time with you. Be upfront that you're a first-time buyer and that you want to understand the process better. If you don't know a good lender, ask for referrals from people you know who have recently purchased a home.

2. Be willing to provide basic information your lender needs — income, debts and obligations such as child support or student loan.

3. Share your plans and dreams. If you want to flip the home in two years, say so. If you want to live in it for 10 years, say so. It will make a difference in the type of loan your lender recommends.

4. Come clean about any problems you think you may have getting a loan. If you weren't so great at paying bills while you were in school, you may have hurt your credit rating. Tell the lender that you may have possible derrogatories and what you've done to repair the damage.

5. Be flexible about your goals and don't try to get a loan that's beyond your means. You'll build equity and wealth much more quickly if you buy a home you can comfortably afford.

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Is it safe to have multiple lenders run my credit?

Three bureaus generate your credit scores: Equifax, TransUnion and Experian. Lenders report your monthly activities on student loans, credit cards, auto loans and mortgages to these bureaus, who then score you on an ongoing basis. Your credit scores change constantly each month based on factors like:

• Credit card balances relative to limits
• Number of open accounts and length of time accounts have been open
• On-time versus late payments
• Number of inquiries

When it comes to that last factor, credit card inquiries hit your score harder than car and mortgage inquiries. For example, if you’re out shopping at three department stores and allow all three stores to process new credit cards for you, the bureaus’ scoring models are coded to lower your score for each individual inquiry.

Each inquiry would lower your score by up to five points, or more if you have just a few accounts and/or a short credit history. The inquiries would stay on your credit report for 24 months, and your score wouldn’t recover for about 12 months — until you demonstrated strong payment history and balance-to-limit control on those new cards.

Car and mortgage inquiries make less of an impact because the bureaus know consumers shop for these big-ticket items. The bureaus’ scoring models are coded to “de-duplicate” multiple mortgage inquiries, since the end result of those inquiries would be one mortgage.

For example, if you were shopping for a mortgage with three lenders, and all three ran your credit one week, the three inquiries would show on your report, but would be scored as only one, so your shopping process would cause your score to shift by up to five points instead of up to 15.

How long can I shop for mortgages without damaging my credit?

Equifax, TransUnion and Experian are constantly changing scoring models. The newer the model, the longer a consumer can shop for mortgages with multiple lenders and have all inquiries scored as one. There’s no law requiring lenders to upgrade to the latest model, and it’s impossible to know which model is being used by which lender at any given time.

The oldest scoring models still being used by lenders de-duplicate multiple mortgage inquiries posted on your credit report in the past 14 days. The newest models de-duplicate multiple mortgage inquiries posted on your credit report in the past 45 days.

Obviously, the newer models allow for more shopping time, but since you won’t know which credit scoring model your various lenders are using, it’s safest to get your mortgage shopping done (including having lenders run your credit) within 14 days.

Will lenders take a credit report I ran myself?

You’re reminded constantly by the media and advertisements that you should check your credit regularly, but before you do anything, you must understand the following critical points:

• Federal law requires mortgage lenders to check your credit history and scores when approving your loan. So even if you have your own report, the lender can’t accept it. If they’re going to lend to you, they must run their own credit report on you. They will run scores from all three bureaus, and typically use the middle of the three scores to finalize your rate and make loan approval decisions. However, some lenders might provide initial rate quotes if you can provide a reliable and recent credit score estimate.
• Federal law also states consumers must be able to obtain a free credit report every 12 months. The only government-sanctioned place to do this is AnnualCreditReport.com. This service provides a stripped down report that doesn’t give you a credit score. There is a charge for the version of the report that includes your score. Before you pay a third party that lenders won’t accept, remember that if you’re a serious mortgage shopper (rather than someone just monitoring your credit history for other reasons), you’ll need to allow a mortgage lender to run your credit report. That lender can brief you on your credit scores and history.

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Rates rise and fall when bond markets sell off or rally, respectively, based on how they interpret daily economic news and data. This rate volatility will continue as the Fed winds down its six-year rate stimulus campaign.

If you understand the loan process, you can capitalize on rate volatility by capturing the lows when they come. Ask your lender the following five questions to align your loan process with this volatile rate market.

1. Did I miss the mini refinancing boom of 2014?

No. Rates are low enough that the mini refi boom from mid-October could resume. But with economic uncertainty driving rate markets up and down daily, you must have a plan. You can’t just lock a rate when they dip and hope your loan closes on time (see #5 below).

The best approach is to contact a lender if you’re considering refinancing. Taking this step ensures you will have the loan process underway, with a rate lock being the last thing you’re waiting for. Then you can set a rate target with your lender based on short- to medium-term rate market expectations, and give your lender a standing order to lock the rate when they see it during volatile daily trading.

2. How do I get accurate rate quotes without submitting all my documentation?

As you begin your loan process, you can find out exactly what lenders are quoting by submitting a custom loan request on Zillow. However, it is important to note that once your credit report is run and your financial and property documentation information is collected, any changes or updates to your original loan request can affect your loan amount and mortgage rate.

Additionally, a lender will analyze whether the math supports paying points on a refinance given your objectives—paying 1 point (which is 1 percent of your loan amount) should lower your rate by at least .25 percent. In this case, the interest cost savings from the .25-percent lower rate repays the cost of the point in four years, and everything from that point forward is pure benefit from the lower rate.

You should also work with your lender to determine whether a cost or no-cost refinance is better for you financially. Refis cost about $2,500 to $4,500 depending on your market, and your rate will be .125-percent to .25-percent higher if you choose a “no-cost” refi. Knowing this, you can prepare for a lender consultation by analyzing cost vs. no-cost refi options in advance.

3. Why should I submit my documents as soon as possible?

Your lender will need to pull your credit report, monthly debt, pay stubs, W-2s, tax returns, asset statements, and anything else impacting your financial profile such as promotions, career changes, job gaps, maternity leave, loans you’ve made or received, and income or debt from divorces.

Your loan officer will have to collect and analyze these documents, which an underwriter at the bank will then have to approve. An appraiser must inspect your property, then submit a full report for the lender to review, along with a title report, insurance, and any other relevant property information (such as a full questionnaire, budget, bylaws, homeowners association rules, and Articles of Incorporation if your property is a condo).

If you start the loan process early by submitting your application and required documents, you can avoid unpleasant surprises or adjustments before you lock a rate.

4. What if rates drop after I lock my rate?

You have options if this happens. Whether you’re locking a purchase or a refi loan, rate markets will move up or down after you lock your rate.

If rates rise, your lock protects your rate as long as your loan closes within the rate lock period (see #5 below).

If rates drop, ask about your lender’s “rate renegotiation” policy. Most lenders follow a model similar to this: If rates drop at least .25 percent, you can renegotiate your rate to capture about half of that drop. So if you locked at 4.125 percent with a lender that followed this type of model, and rates dropped to 3.875 percent, you could renegotiate your rate to 4 percent.

5. Will my loan close before my rate lock expires?

Ask your lender if their quoted rate allows enough time to close your refi given all factors of your profile and their bank’s “turn times.” It’s important to know refinance loans in a rate-fueled market don’t close as fast because lenders will always put their purchase loans ahead of their refis in line for approval.

Be sure to ask your lender about their lock extension fees, and make them clarify who pays the extension fees: you or them? Lock extension fees range widely. They can be .125 percent of the loan amount for 15 extra days, or .125 percent  for 5 extra days. On a $250,000 loan, that means a 15-day extension could range from $312.50 to $937.50.

The post Refinancing in a Volatile Rate Market – Get the Facts First appeared first on Access Mortgage Inc..

You've already missed the bottom of the market, but that doesn't mean there aren't great buys to be had out there. Your community may not have appreciated as quickly as some of the big metro areas have recently. Your boom may yet come.

To begin with, the economy is growing. From information gathered on or before August 22, 2014, the Federal Reserve's "Beige Book" report found economic activity is up in all eight national districts, including consumer spending, freight loads for deliveries of goods, and more.
 
But there are even better reasons to buy a home right now. Here are just a few:

More jobs are available

Houses hedge against inflation

Housing price gains are slowing

Mortgage interest rates are still low

Pent-up demand ready to release

Buy VS rent ratios favor homeownership

The takeaway

A housing market never remains even. There are always surges and dips. Buyers could wait for better market conditions, but the present alignment of low mortgage interest rates, slowing home prices, rising rents and pent-up demand add up to great reasons to buy a home right now.

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Credit scores are compiled separately by three consumer reporting agencies — Equifax, Experian, and Trans Union. These credit reporting bureaus calculate scores differently, based on formulas and criterias of their own devices.

• Equifax Beacon 5.0 Facta: scores range from 334 to 818. 
• Experian Fair Isaac V2: scores range from 320 to 844. 
• Trans Union FICO Risk score Classic 04: scores range from 309 to 839.

Your credit score is a number that reflects the information in your credit report based on whether you pay your bills on time, how much you owe creditors, accounts you've paid off, and derogatory information such as unpaid bills, late payments, judgments and liens. It also includes inquiries into your accounts from lenders, landlords, and employers.

When you apply for a home loan, your application includes giving your lender permission to "pull your credit" and decide whether to lend to you and the rate of interest on the information contained in your credit scores. The higher the score, the better terms you'll receive from the lender.

Once your credit scores are reviewed by your mortgage lender, you'll receive a computer-generated report of the findings, but it won't have a copy of your entire credit report. It may include key factors that adversely affected your scores. Some examples might include:

• Too many inquiries in the last 12 months 
• Time since most recent account opening is too short 
• Proportion of loan balances to loan amounts is too high 
• Too many accounts with balances 
• Amount owed on revolving accounts is too high

What if you're declined for the loan, or your lender wants to charge a higher interest rate than you were expecting? Is there anything you can do?

Yes, talk to your lender and ask for help repairing or correcting your scores. For example, you may have innocently done something that resulted in a negative score, such as closing a line of credit. Or, you may not have realized that a late payment would bring your score down as much as it has. The lender will tell you exactly what you need to do to raise your scores.

Under federal law, you have the right to obtain a free copy of your credit report from each of the national consumer credit reporting agencies. Go to FreeAnnualReport.com.

If you find an error — derogatory data that doesn't belong to you, or an account that shows the wrong balance, simply show the lender your canceled check, release of lien or other proof that the credit report is wrong.

You'll also have to correct the information yourself separately and in writing with each agency. It may take a few weeks for the agencies to record the updated information.

In the meantime, work with your lender and do what he/she tells you to do to get the best rate, including paying more than the minimums, paying on time, and making sure that your debt-to-income ratios are well within your ability to repay all your loans.

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Refinancing can lower your payment, get you out of a bad loan or remove PMI from your mortgage payment. Mortgage rates are currently very low, so here are some reasons to refinance your home.

If your home is worth more than your current loan, and at a higher interest rate than currently available, you should look into refinancing. If you have an adjustable rate mortgage, now is the time to get out from under it.

Are you looking to do renovations on your home or need extra cash for unexpected bills? You may be able to refinance and be able to get cash from your home. You can also use this money to get started investing in real estate.

Do you have an equity line on your home? This is a second mortgage that may have a variable rate. Refinancing may allow you to combine your first and second mortgage and lock in a low rate.

If you are considering refinancing your home loan, call your Access Mortgage to see what we have to offer. It may not be as daunting as it seems, and may save you a lot of money in the long run!

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FICO scores, the credit-scoring system used by the Fair Isaac Corporation to help banks and other lenders determine a borrower's creditworthiness, can fluctuate for many reasons. Your debt-to-income ratio, whether or not you make only minimum payments, how many inquiries you have, new credit cards, and other factors each play a part in determining your overall score.

But nothing impacts credit scores like a missed payment. Your payment history accounts for 35 percent of your FICO score. According to the Ask Experian Team, a missed payment will also have the longest lasting impact. The more recent the missed payment occurred, the greater the impact and the more missed payments you have, the longer it will take to restore your scores.

The most recent research on how badly late payments affect credit scores was performed by FICO's analytics executives back in 2011. However, the numbers still work. The researchers simulated various types of mortgage delinquencies and then ran the numbers using three credit bureau profiles. The consumer profiles scored 680, 720, and 780 respectively before they missed the first mortgage payment. If a borrower were 30 days late on a mortgage payment, their revised credit scores dropped between 600-620, 630-650, and 670 to 690.

For the best-scoring consumers, the drop in credit scores is the most punishing. The first consumer's credit takes 9 months to return to the 680 level, but the second consumer's score doesn't repair itself for 2 ½ years. And for the best-scoring consumer? It takes 3 years to restore scores to the 780 range.

In general, the higher the starting score, the longer it takes for the score to fully recover, says the researchers.

Not only does the information stay on your credit report for years, but if the delinquent homebuyer wants to buy another home, their scores may keep them from qualifying for good rates. Borrowers with poor credit may pay higher interest rates, or they could be refused a loan because they may not qualify for mortgage insurance. In addition, the borrowers will pay punishing interest rates for all credit, including car loans and credit cards.

Experian advises delinquent borrowers to make the account current as quickly as possible. Then they should continue to demonstrate a current history of on-time payments. Borrowers should use at least one credit card, paying in full each month to avoid finance charges. These on-time payments will add positive activity to offset negatives from the past.

Over time your credit scores will rebound. The length of time it takes to recover will depend on how serious any other negative issues were.

The post The Affect of Late Mortgage Payments on Credit Scores appeared first on Access Mortgage Inc..

1. How long do you plan to stay in the home?

It makes a big difference in recouping the cost of refinancing a home loan. If you don't plan to own the home for roughly three to five years or more after refinancing, it might not make sense to incur the costs of refinancing.

2. What are the closing or settlement costs for refinancing?

You should expect to pay about the same amount as when you purchased. Expenses will include a new title policy or abstract, a new appraisal, and lender's fees.

Typically, lenders charge an origination fee or a "discount fee". If it's a "no-cost" refinance, there's really no such thing – the fee will actually be rolled into a higher interest rate. Count on your closing costs to be similar to what you paid when you originated your first loan. In other words, it's a new loan, with all-new fees.

3. What percentage rate are you currently paying?

Once upon a time, mortgage lenders advised refinancing only if you could save two percentage points on the loan. That's so you can get your closing costs back if you need to sell a year or more later, assuming your home doesn't go down in value.

But you can refinance by getting as little as 1/2 percent lower than your current mortgage interest rate and still be able to sell within a reasonable time – three years or so. What you need to do is figure how long it will take you to pay back your closing costs before you sell your home.

You have a $200,000 mortgage, 30 yr. fixed rate, 6% interest, with a monthly payment of $1199 in principal and interest or PITI. Assuming $2,000 in closing costs, you refinance for another 30 years.

At 2 points lower, or 4% interest, your new PITI (principal and interest) is $ 954.83 With a monthly savings of $244.17, it would take you just over 8 months to pay back the cost of the refinance.

At 1/2 % of a point lower, or 5.5% interest, your PITI is $ 1135.58. With a monthly savings of about $64, it would take you a little over 31 months to break even, a good strategy if you plan to stay in your home at least 3 years.

4. What type of loan do you currently have? Do you have a hybrid adjustable rate mortgage that needs refinancing?

Many hybrid loans roll from fixed rates to adjustable become adjustable after one year, three years, or five years. If you qualified for the adjustable rate loan originally, but have since increased your income or paid down your mortgage and built some equity, now may well be the time to refinance.

Interest rates have hovered near the five-point mark or lower for well over six years, making it likely that adjustable rates have nowhere to go but up, so it may be a good time to get into a fixed rate.

5. Have your plans or circumstances changed from when you first purchased?

Perhaps you're doing well and want to accelerate your pay-off by refinancing to a 15-year term. Additional payments to principal can be voluntarily added to your 30-year fixed rate loan payment, so refinancing is only wise if you can get a much lower interest rate than your current term.

Conversely, perhaps your intentions of paying off a 15-year note have changed, due to decreased income, family obligations or some other reason. In that case, a refinance to a 30-year term will ease your payments, but the majority of your note will be to pay interest, with little going toward your principal for several years.

Ask your mortgage banker or broker and your financial advisor or tax preparer to help you decide if refinancing is the right answer for you now.

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